Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • Post Fed Technical Levels Update

Futures are slightly lower ahead of today’s jobs report following another night of underwhelming earnings.

AAPL (down 3% pre-market) earnings underwhelmed and global shipping giant Maersk (down –6% pre-market) warned of a potentially slowing global economy and that’s modestly weighing on sentiment this morning.

EU and UK economic data overnight was sparse and largely in-line and aren’t moving markets.

Today focus will be on economic data.  Expectations for the jobs report are as follows:  Job Adds 183K, UE Rate: 3.8%, Wages: 0.3% m/m, 4.0% y/y.  Numbers at or below those readings will be welcomed as Goldilocks and likely further pressure Treasury yields (and lift stocks).

Additionally, we also get the ISM Services PMI (E: 53.0) and the key here is the number stay comfortably above 50.  Finally, there is one Fed speaker: Kashkari at 12:45 p.m. ET, but he shouldn’t move markets.

Jobs Report Preview

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Jobs Report Preview

What’s in Today’s Report:

  • Jobs Report Preview
  • EIA and Oil Market Analysis (Still Bullish)

Futures are slightly higher as markets continue to digest the week’s early rally following a quiet night of news.

Economic data underwhelmed as the UK Construction PMI and EuroZone Retail Sales both missed estimates, but neither number is moving markets this morning.

On the stimulus front, the Democrats continue to move forward with reconciliation and markets now expect a stimulus bill between $1.5-$1.9T sometime in March.

Today stimulus headlines will continue to drive markets and the real question now is whether the stimulus bill ends up more towards $1.9 trillion (more bullish for stocks, yields and inflation in the short term) or $1.5 trillion (less bullish for stocks, yields and inflation in the short term).

Away from stimulus expectations, the key number today is Jobless Claims (E: 835K) and markets will want to see a continued decline to show the labor market is not deteriorating further.  We also get two Fed speakers: Kaplan (1:00 p.m. ET) and Daly (2:00 p.m. ET), but neither should move markets.

Jobs Report Preview

What’s in Today’s Report:

  • Jobs Report Preview
  • Why Is the Dollar Dropping So Sharply (Hint:  It’s Not the Election)
  • FOMC Reaction

Futures are moderately lower mostly on digestion of this week’s massive rally, although the political news over the last 24 hours was a slight negative for markets.

Biden continued to move closer to securing 270 Electoral College votes and is now leading in Georgia, Arizona, and Nevada, and some of those states may be called today.

However, both Georgia Senate races appear headed to a runoff in early January, and that could delay stimulus into early 2021 (this is the “reason” for the weakness in futures, other than just digestion).

Today focus will remain on the election as several states could be called, effectively ending the election (court cases will continue but as of yet none appear powerful enough to overturn the apparent result).

Economically, the jobs report will be in focus and the expectations are as follows: Job Adds: 600K, Unemployment Rate: 7.7%.  A number moderately better than expectations (that’s strong enough to reflect a good recovery but not so strong that the amount of expected stimulus starts to move lower) is the best outcome for stocks.

Jobs Report Preview

What’s in Today’s Report:

  • Jobs Report Preview
  • EIA Takeaways and Oil Data

Futures are moderately higher on more stimulus hopes combined with solid economic data.

Positive chatter regarding a potential stimulus deal continued overnight with whispers implying the deal may be worth more than $1.5T.  But, I want to again caution that many hurdles remain to get a deal done by the election (most important of all being if it can pass the Senate, and that remains unclear).

Economic data was solid overnight as Final Sept. EU manufacturing PMIs met expectations at 53.7.

Stimulus headlines will drive trading today and there’s an outside chance we get an announcement of a deal between Treasury Secretary Mnuchin and Speaker Pelosi.  But, while the market will embrace that, as mentioned, it remains to be seen if the Senate will pass something prior to the election.

Outside of stimulus, we get two important reports on growth (Jobless Claims (E: 850K and ISM Manufacturing PMI (E: 56.3)) and one on inflation (Core PCE Price Index (1.4%)) and the market will want to see solid numbers across the board to imply the economic recovery is not plateauing.  Finally, there are two Fed speakers today, Williams (11:00 a.m. ET) and Bowman (3:00 p.m. ET), but neither should move markets.

Jobs Report Preview

What’s in Today’s Report:

  • Jobs Report Preview
  • EIA Data and Oil Update

Futures are moderately lower on digestion of Wednesday’s rally and some disappointing economic data.

EU Retail Sales badly missed estimates (-1.3% vs. (E) 1.5%) which is slightly increasing concern about the EU economic recovery.

Global August service and composite PMIs (China/EU) were generally in-line with expectations while the British service PMI slightly missed estimates (58.8 vs. (E) 60.1).  Bottom line, the numbers weren’t great, but they weren’t awful either and generally speaking they won’t change the current market outlook.

Today there are two important economic reports, Jobless Claims (E: 977K) and the ISM Non-Manufacturing PMI (E: 56.8), and the market will want to see the actual data close to or better than both numbers to reinforce the economic recovery is ongoing.  There’s also one Fed speaker today, Evans at 1:00 p.m. ET.

Finally, it’s important to note that vaccine “chatter” is getting louder and the chance we get a vaccine announcement before the election (November 3rd) is rising.  Yesterday the CDC formally notified all 50 states to be ready to distribute a vaccine by late October/early November, so I want everyone to be aware of that, as a vaccine announcement would be another positive for stocks.

Jobs Report Preview (Recovery On/Recovery Pause/Recovery Stall)

What’s in Today’s Report:

  • Jobs Report Preview:  Recovery On/Recovery Pause/Recovery Stall

Futures are moderately lower following lack of progress on the stimulus bill, combined with further escalation of U.S./China tech tensions.

Markets were hoping for a stimulus deal by today, but there’s been no progress on negotiations for two days.  So while the market still fully expects a deal by next week, there is disappointment that it likely won’t get done by the end of this week.

U.S./China geo-political tensions continue to rise as President Trump issued an executive order banning U.S. transactions with the parent companies of TikTok and WeChat.

Focus today will be on the Employment Situation report and expectations are as follows:   Job Adds: (E) 2.0M, Unemployment Rate: (E) 10.5%.

Bottom line, the strong economic data from earlier this week has made this jobs report more important than it was going to be, as this morning’s number now has the chance to signal the economic recovery is still on (a positive for stocks) or increase concern it’s stalling (which will be a headwind on equities, especially at these levels).

Jobs Report Preview

What’s in Today’s Report:

  • Jobs Report Preview
  • A Historic Quarter for the Energy Markets

Stock futures are trading modestly lower this morning after the S&P 500 registered its best quarterly gain in over 20 years in Q2 while economic data was mostly better than expected overnight.

Economically, China’s Caixin Manufacturing PMI firmed to 51.2 in June from 50.7 in May while the Eurozone Manufacturing PMI rose to 47.4 from 39.4 in May pointing to a continued rebound in economic activity last month.

Today, we will get our first look at June jobs data with the ADP Employment Report (E: 3.500M) due out ahead of the bell while the ISM Manufacturing Index (E: 49.0) and Construction Spending (E: 0.8%) will both be released shortly after the open.

Later in the day, the only real catalyst to watch for is the release of the latest FOMC Meeting Minutes at  2:30 p.m. ET as traders will be looking for any additional insight into the Fed’s future stimulus plans or view of the state of the economy.

Jobs Report Preview

What’s in Today’s Report:

  • Jobs Report Preview
  • ECB Decision Takeaways (The Outlook for Europe Continues to Improve)

Futures are sharply higher thanks to a big rally in European markets, which rose on the hopes for more stimulus.

The rally in Europe didn’t come because of any new headlines, and instead appears to be a delayed reaction to the bigger than expected ECB QE program, combined with the passage of the German stimulus earlier in the week.

Economically, the only notable number was German Factory Orders which fell –25.8% vs. (E) -20%.

Today the focus of markets will be the jobs report, and the estimates for job adds and the unemployment rate are as follows: Job Adds:  -7.725M, UE Rate: 19.8%.

Practically speaking, anything less than 10 million job losses likely doesn’t cause a pullback in stocks, while a number under 5 million job losses could extend today’s early rally, because markets are still solely focused on the incremental changes in economic data, not the historically bad absolute values.  The only other notable economic report today is Consumer Credit (E: -$14.0B).

Jobs Report Preview (Can the Market Look Past 20 Million Job Losses)?

What’s in Today’s Report:

  • Jobs Report Preview (Could the Market Look Past 20 Million Job Losses?)
  • Why Are Treasury Yields Rising?
  • EIA Analysis and Oil Update

Futures are sharply higher thanks to better than expected Chinese export data.

Chinese exports rose 3.5% vs. (E) -11%, sparking hope that their economy is quickly getting back to “normal.”

But, in reality, data was more mixed than good as Chinese service PMIs remained weak (44.4) while German Industrial Production missed estimates –9.2% vs. (E) -6.4%.  Additionally, the better than expected Chinese export data was due in part to a surge in medical supply exports, something that’s hopefully not needed for much longer.

Today focus will be on Jobless Claims (E: 2.991MM) and has been the case for the past few weeks, continued declines from the previous week will give the market hope that the economic “worst” is behind us.

Finally, there are multiple Fed speakers today including Bostic (8:30 a.m. ET), Kashkari (12:00 p.m. ET) and Harker (E: 4:00 p.m. ET), but none of them should move markets.

Jobs Report Preview

What’s in Today’s Report:

  • Jobs Report Preview
  • Why Have Stocks Rallied?

Global equities rallied overnight and stock futures are trading higher today after China reduced tariffs on $75B worth of U.S. goods, spurring optimism for a “phase two” trade deal and further easing concerns about the coronavirus outbreak’s impact on the global economy.

Outside of trade news, OPEC+ has agreed to cut their collective oil output target by 600K b/d to help support oil prices which crashed into a bear market this week on Wuhan coronavirus fears.

Today, there are two economic reports to watch: Jobless Claims (E: 215K) and Productivity and Costs (E: 1.5%, 1.2%) while two Fed officials will speak: Kaplan (9:15 a.m. ET) and Quarles (7:15 p.m. ET).

Additionally, there are a few earnings releases due out including: TWTR ($0.28), BMY ($0.88) and UBER (-$0.68), however given the latest trade-war news, the markets will remain largely focused on China’s decision to cut tariffs and any new developments regarding the coronavirus outbreak.